The EUR/USD pair has been grinding higher during early Monday trading, breaking above the 1.09 level. While this is a large, round, psychologically significant level, the 1.0950 level above is the real resistance from what I see. We have recently gapped higher in this market, so obviously there is quite a bit of bullish pressure underneath. In order to break down through the bottom of the gap, it would take a significant amount of bearish pressure and I don’t think we have that currently. I believe the pullbacks continue to be buying opportunities, and that the 1.08 level below will be massively supportive. Even if we break down below there, we could go as low as the 1.0730 level before the downtrend would take effect. Because of this, I am a “buy only” trader when it comes to this pair, and believe that we will probably go reaching towards the 1.10 level above over the longer term. That’s not to say that it won’t be choppy and of course those European Union negotiations with the United Kingdom can have an effect on this pair. As long as we are in a bit of a “risk on” type of environment in the stock markets and futures markets, I think that this pair will continue to grind higher. However, I believe that “grind” will continue to be the main word to pay attention to hear. I don’t think that is going to be easy, after all the easy money was made several days ago before the gap. Because of that, I think that there are a lot of traders out there that wish they were long of this market, so pullbacks will be looked at as potential value in a market that certainly sees a lot of buying pressure.
Written by FX Empire